Having got and LX3 I must admit I love it, the 24mm wide angle is lovely and really useful [Can't recall anything wider of the top of my head] but as stated in the post above it tops out at 60mm [x2.5 zoom] which can be a bit annoying some of the time [When you cant get any closer to the action]. Then again this is a bit one sided seeing as I haven't tried the TZ7, although most reviews seem very positive.
In my opinion:
If like me the camera is a back-up to a full dSLR set up and/or you don't need the extra magnification then you want the LX3 [The image quality SHOULD be higher due to the physically larger sensor]
However, if it'll be your only camera the TZ7 has far greater flexibility [25-300mm x12 zoom], and would be the one I'd recommend
If you want know anything more about the LX3 I do my best to answer it